From our friend, Al the Loan Guy:

“It was an exciting week for mortgage markets! Tuesday, the Fed and the Treasury announced a new program to purchase up to $500 billion in mortgage-backed securities (MBS), and mortgage rates dropped sharply after the news. The MBS purchases are expected to take place over the next few months. The goal of the new program is to lower mortgage rates, and the immediate reaction certainly was a big step in the right direction, as mortgage rates moved significantly lower during the week.

According to the Wall Street Journal, consumers around the country responded quickly to act on the drop in mortgage rates. In many cases, call volumes during the week were far above their recent levels as homeowners rush to refinance.

In the housing sector, October Existing and New Home Sales continued to fall modestly. On the plus side, inventories of unsold existing homes declined in October. Also, the outlook for future home sales grew more positive this week, since lower mortgage rates make homes more affordable. The chief economist for the National Association of Realtors (NAR) estimates that each 1% decline in mortgage rates could generate between 500,000 and 800,000 home sales. Combined with the recent drop in home prices, homes are more affordable now than they have been in years.”

Some banks are aggressively creating programs to help keep homeowners in their homes. Ckick on this link to see which banks are modifying loans with specific programs:

Chart of Programs